Australian dairy industry agrees on voluntary code of conduct

Posted by AFN Staff Writers on 10th October 2016

Key players within the Australian dairy industry have agreed to a new voluntary code of conduct.

Australian Dairy Farmers (ADF), state dairy farming groups and dairy processors have agreed to follow a code which provides greater transparency in contracts and supply agreements.

According to United Dairy Farmers of Victoria (UDV), the code will also include the following:

  • Ensuring a pricing formula or mechanism is clearly defined within a contract

    • Ensuring pricing adjustments to farmers throughout a contract are clearly defined and that there will be no retrospectivity

    • Ensuring suppliers are given adequate notice if step-downs are to occur

    • Ensuring that farmers receive all payments accrued over the term of a contract

    • Ensuring processor exclusivity does not occur in cases where the processor has a contracted volume limit

    • Ensuring a clearly defined mechanism for giving notice of contract termination

    • Ensuring a clearly defined mechanism for modifying contract conditions, and giving farmers the right to negotiate variation

David Basham, ADF acting president, said that incorporating these principles into a code of conduct will give farmers, or their representative, the opportunity to have a contract or supply agreement which is truly negotiated.

“The ADF together with the state member organisations have worked hard since the crisis unfolded to ensure future milk supply agreements are balanced, fair and transparent. It has been a long process to get to this stage and a major breakthrough for the entire industry,” Basham said.